Brokers can earn referral fees from Woolwich legal fees

Conveyancing Alliance, the online conveyancing distributor, has revealed that advisers using its Rapid Remo product will earn a £135 referral fee if they take the £300 cashback now offered by Woolwich rather than use the lender’s ‘free legal’ offering.

Yesterday, Woolwich announced the £300 cashback option for those advisers and clients wishing to use their own solicitors rather than its free legal offering.

Conveyancing Alliance had already created a £300 cashback option in anticipation of such products.

By abstaining from ‘free legals’ and choosing Conveyancing Alliance’s Rapid Remo conveyancing product advisers not only earn an additional £135 but they also guarantee their client/broker fee.

Conveyancing Alliance says most free legal offers make no provision for the deduction and payment of the broker’s fee.

It has a built-in ‘broker fee guarantee’ on its Rapid Remo which is particularly relevant given advisers are increasingly reliant on client fees that are payable at completion.

Conveyancing Alliance has repeatedly urged advisers not to take up the ‘free legal’ offerings which it believes do not always treat customers fairly given the poor value and the lack of client representation.

Harpal Singh, managing director of Conveyancing Alliance, says: “We believe this is a significant moment in the world of remortgage conveyancing. We now have a lender in Woolwich which has recognised that ‘free legal’ arrangements are not for every client remortgage and not ideal for fee-charging advisers.

“Conveyancing Alliance has long campaigned on this very issue and urged advisers to consider the cashback where offered, and use this money to pay for our quality, client-focused conveyancing. By opting for the £300 Woolwich cashback and using our ‘Rapid Remo’ product, advisers can earn themselves a £135 referral fee plus they will not miss out on outstanding client fees being paid at completion.

He says he hopes Woolwich will be the first of many lenders to move down this route.

The article should make it clear that the £300 cashback isn’t an alternative to free legals, but will be paid in any event. So the customer choice is between taking free legals and having £300 in their pocket or not taking free legals and being £300 worse off. It is hardly news that brokers can make referral fees from refering conveyancing and the Conveyancing Alliance “product” is hardly groundbreaking either as many many firms have offered conveyancing deals to be funded from cashback alternatives for years (Goldsmith Williams springs to mind for one).